Posted on November 2, 2009 by the China Media and Entertainment Law Team

WTO Ruling Upholds U.S. Claims against China on Importation and Distribution of Publications and A/V Products

The WTO released a landmark decision ordering China to ease some of its curbs on imports of American popular culture, noting that Beijing was breaching international trade rules by blocking foreign-owned companies from acting as importers and wholesalers of printed material and certain A/V products. The WTO found that China was requiring foreign companies to distribute their publications and A/V products through state-owned companies in violation of commitments to open the sales and distribution market in China and to treat foreign-owned companies similarly to domestic companies. The WTO Dispute Panel also ruled that China was in violation of its trade obligations because of the prohibition on foreign companies directly offering to Chinese consumers the ability to download music their computers and cell phones. The Dispute Panel ruled in favor of China in finding that (i) China’s criminal law was sufficient to deter piracy, and (ii) the requirement that foreign films be distributed through designated entities was consistent with existing trade rules.

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Posted on November 2, 2009 by the China Media and Entertainment Law Team

WTO Decision on IPR Dispute

In January 2009, a WTO dispute settlement panel ruled on an IPR dispute the U.S. brought against China in April 2007. The U.S. argued that China violated its obligations under the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (“TRIPS Agreement”) in three ways, namely, failure to provide copyright protection of works banned in China, the unlawful re-release of seized counterfeit goods, and a failure to set proper thresholds for criminal prosecution of counterfeiting and piracy. The panel ruled in favor of the U.S. for the first two claims, ordering China to amend its copyright law and customs rules. 

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Posted on November 2, 2009 by the China Media and Entertainment Law Team

WTO Dispute Settlement: Foreign Financial Information Providers Operating in China

On April 30, 2009, the State Council issued a new measure to implement China’s WTO settlement agreement with the EU, U.S., and Canada on restrictions placed on foreign financial information providers in 2007. The new measure effectively replaced Xinhua News Agency with the State Council Information Office as the key regulator for foreign financial information providers. The new system also formally reinstitutes the right of foreign financial information providers to distribute products directly to their customers. 

Foreign news agencies, industry associations and foreign governments all lodged complaints in the fall of 2007 when Xinhua News Agency, acting as both industry regulator and competitor, issued regulations that would have severely hindered the business operations of foreign news agencies in China. These complaints ultimately resulted in a WTO dispute filing by the EU, U.S. and Canadian governments in March of 2008.   In November 2008, China agreed to implement a new regulatory framework by June 1, 2009 to settle the dispute. The “Measures on the Administration of the Provision of Financial Information Services in China by Foreign Institutions” (“Measures”) were issued to comply with this settlement agreement.  

The Measures define “financial information services” as “the services provided to users engaging in financial analysis, financial transactions, financial decision-making or other financial activities in respect of the provision of the information and/or financial statistics which may affect financial markets.” It further emphasizes that “such services are separate from news agency services.”

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